Research by KPMG in Malta has shown that there are presently around 50 audit committees with an average of three members per committee. Out of the 123 individuals involved in audit committees, 31 per cent are foreign nationals and 13 per cent are involved in more than one committee. On average, less than 15 per cent of audit committee appointments are held by executive directors.
The KPMG conducted an analysis of audit committees in Malta focusing on listed entities, banks and insurance companies in anticipation of the local launch of the Audit Committee Institute.
The ACI is locally sponsored by KPMG and Malta will be the 29th country in this international network.
The Audit Committee Institute provides a dedicated platform for members of audit committees, by creating a forum for exchange of experience and access to a wealth of information on developments relevant to the operations of an audit committee. The ACI also enhances the exchange of views between auditors and board members.
In Malta the Institute will employ a range of tools to assist audit committee members and non-executive members in meeting their oversight role. These tools include the ACI Forum, Audit Committee Bulletins and access to select publications and other resources, sourced primarily via the global ACI network.
To help audit committees focus their agendas on key challenges throughout the year, the UK ACI has issued its annual "aide memoire" to directors, Ten To-Do's For Audit Committees in 2010 - highlighting issues that should be at the top of the audit committee's current agenda.
According to the UK ACI, when considering and carrying out their 2010 agendas audit committees should regain control of the audit committee agenda; understand the risks posed by cost reductions made in response to the economic crisis; focus closely on all financial communications; continue to monitor fair value issues, impairments and management's assumptions underlying critical accounting estimates; and rethink the audit committee's role in risk oversight.
Audit committees should also make sure internal audit is properly focused and fully utilised; prepare for the potential impact of key public policy initiatives on compliance, risk, and governance processes; help reduce the risk of misalignment as the company undergoes change; take a fresh look at the audit committee's composition and leadership; and be vigilant as the economic crisis continues to put pressure on compliance and anti-fraud programmes.
Juanita Bencini, advisory partner at KPMG responsible for regulatory and compliance who is spearheading the ACI initiative in Malta, stated that even though established for markets where audit committees are more evolved, it is striking how these to-dos are also hugely relevant for the Maltese market.
"I have seen audit committees in Malta evolve significantly over the years, both in listed entities as well as regulated entities such as banks. In part this has been fuelled by regulation but companies are beginning to appreciate the input and insight that a properly functional audit committee can provide to an entity. These to-dos can be a great catalyst for shaping our local audit committees' agendas and focusing their discussions during 2010," she said.
The Malta ACI is keen to establish itself as the reference resource for audit committee members with these "to-dos" providing just a glimpse of the insights the network has to offer on the area. The Malta ACI will shortly be launching its first event, exploring the critical issues and challenges facing audit committees locally.
Ideas will be exchanged via a question and answer session with Phil Hodkinson, audit committee chair and non-executive director of three large UK companies: BT Group plc, Resolution Ltd and Travelex Holdings Ltd.